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HBD Interest Payouts For October 2022

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@geekgirl
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Hello November! It is time to look at HBD interest payments for October 2022. This will mark the 20th month since Hive blockchain started paying interest. Blockchain continues to pay 20% APR. Of course this is now how it initially started. APR increased gradually and there were changes made along the way. All of these changes have made HBD a stronger stablecoin, that actually functions as intended.

In October, Hive blockchain implemented another hardfork, Hive hardfork 26 - Evolution. This hardfork brought us many interesting and cool features, that also includes some changes to HBD as well. To read the full list of the new hardfork features, feel free to read blog post titled - The Evolution of Hive: Hardfork 26 by @hiveio. No matter how hard we work on making things perfect and how extensive the tests are, when it comes to blockchain hardforks there is always something unexpected when changes are implemented on a live chain. This hardfork had some unexpected results that had to do with block production scheduling. It wasn't something crucial to put the chain at risk, but did require a fix and another hardfork. For this reason you may see the version of the blockchain currently being implemented is 1.27.0, instead of 1.26.00.

The new hardfork has changed HBD haircut rule from 10% to 30%. The haircut rule is a very important defensive mechanism that protects both Hive and HBD. 10% was always seen as a conservative number. But also going too high with this number can create problems that would put Hive and HBD at higher risk. Consider what happened to Terra Luna that didn't have such protective measures in place and allowed the stablecoin marketcap to be much higher than the coin that suppose to back it.

HBD is considered a debt that Hive blockchain suppose to pay. The haircut rule tries to keep this debt in check. If the Hive/HBD ratio goes above 10%, blockchain simply stops printing HBD until this ratio falls back below the threshold. By increasing this haircut rule to 30%, Hive blockchain will be allowing higher marketcap of HBD, but also still keep it in check. It is a big jump from 10%. There were conversation about this before it was implemented in the code. Based on how HBD has been behaving so far, it seems there is enough confidence that 30% wouldn't pose any risks and can actually be beneficial.

Let's take a look at numbers for October, 2022.

Hive Dollars have been performing as expected, as stable as an algorithmic coin can get. Paying 20% APR is still good return on such a low risk investment. However, we still don't see any significant changes in HBD adoption as an investment.

Posted Using LeoFinance Beta